For significant returns, one can look forward towards stock funds, real estate investments, dividend stocks, target-date funds and so on. Each one of these investments does offer something better to investors based on their capital of investments made.
For any beginner who might see the market, they would be surprised about how well it had picked up since the covid dip in March 2020. Furthermore, investment opportunities have opened up looking at the dip in prices, all thanks to the economy and the pandemic arising to be major factors. But if you're looking for longer returns and great investment avenues, then there are some options that we have in mind that would help you out extensively.
But then, if you look at the options that we have to offer, these are mostly investments and long-term gains. But if you're looking for short-term gains, then you might want to trade aggressively to get exponential returns. Yes, there is high risk involved, but the returns surpass your investments at times. However, if you want suitable channels for investments where your money can grow overnight, then we have some options illustrated below.
Growth stocks are investment opportunities where they tend to grow exponentially high in a smaller time frame. Its where users can see their investment double or triple in valuation in a matter of months. They are highly volatile, though. Any slight negative news regarding the company might lead to their stock value plummeting. So if the stock is in a bull market, then gaining profits is quite admirable. However, it is in a bear market; then, it's better to overlook these stocks. These stocks are mostly technology-oriented stocks and IT companies which have this much growth in them.
Real estate is one of the best investment opportunities, provided you have sufficient capital to purchase land in the first place. However, in the long term, based on the location and the activities taking place in the area, the prices would fluctuate considerably. But then it's still an impeccable opportunity to have consistent cash flow once you lease or rent out space which is quite sustainable by itself. Slowly by slowly, you might gain back the investment made to build the property as well.
Bonds are issued by the government or company where multiple people can invest in them. Its where the interest that you receive and the duration of the contract is fixed irrespective of the company's performance. They are quite stable and do offer great returns, provided your investment is comparable. However, the contract could run through 4-5 years while having a stagnant interest given. Also, if the bond agreement is executed, you could repay the principal amount to redeem the bond.
Target funds are dated funds wherein you invest a certain amount monthly and leave the rest to the stock. These are generally long-term stocks where withdrawal of money once invested is locked in. Hence, it's the perfect type of investment if you're looking for another person to manage your funds and you get considerable returns towards the age of retirement.
Stock funds are mostly mutual funds that help a culmination of different companies put into a portfolio that allows investors to invest money into them. Its more targeted towards people who want steady returns without looking at the market from morning to evening. Furthermore, there are different types of stock funds from which you can choose. These include large-cap, medium-cap, small-cap and other sectorial funds, which can be selected for making monthly or one-time investments.
Dividend stocks are the best form of investment if you want significant returns annually based on the company's performance. However, this type of investment can be a bit expensive as you need to buy the stock upright, and the dividend could range anywhere from 5 rupees to 50 rupees based on the company. Hence, it's better to overlook this pointer. But for those who know the growth patterns and the type of operations executed by a company that might pay huge dividends, it's feasible for them.
Significant returns only build up during time over the investment opportunities that have listed above. Its where you can seek out the best option for you based on your capital. Do keep one thing in mind that you will need to have patience. If you have invested during the dip in the market and the economy, it will take months to gain back, and you might see exponential returns in years. It's all about being patient and waiting for the right time to invest your money to see any returns that would help in propelling you in the regions of profits.
Undertaking fundamental analysis and proper research is essential before investing in any particular stock. Apart from this, you should also consider asking seven key questions like 'What does the company do', 'How is it placed among its peers', 'How is the management of the company', etc before investing in it.
There are various terms that play a huge role in determining how to choose stocks for long term investment such as P/E ratio, dividend consistency, etc. For a more elaborative information head below and read the explanation given for better understanding.
Arbitrage Funds are mutual funds with an objective to profit from inefficiency in the price of securities in two different markets. We look at their taxation, meaning and difference with liquid funds in this post. The fund invests in equity and debt instruments.
SIPs or a Systematic Investment Plan is a great tool to build money in the long run with a minimum time period of 5-10 years. It offers multiple advantages like a low minimum capital requirement, averaging benefit, formation of investing habits, etc. However, the most adequate time to stop your SIPs is when your financial goals are met or when you feel to change the objective of your investments.
There are many stocks of companies that could be invested in. For example, companies doing good in the FMCG sector, Healthcare sector, Banking sector, Consumer product sector could be invested in. these are just a few as plenty other companies could be invested in based on your requirements and strategy for investing.
The introduction of Systematic Investment Plan (SIP) in the mutual fund is regarded as one the major breakthrough in the financial sector. It has helped to attract a new class of investors in the sector who were not comfortable to invest a lump sum at a time.
Index funds are mutual funds in which investment are made in the stocks of Index they track such as Nifty, Sensex according to its composition and weightage of the index.
Government securities include both T-Bills (Treasury Bills) and Government bonds which are both short and long-term instruments issued by the Central & State governments for various purposes. Retail investors are allowed to invest in G-Secs provided by the RBI. One can buy them directly from the Stock exchanges in a non-competitive method.
Intrinsic value basically means real stock value and can be calculated using these three ways:
Stock market manipulation is pumping the stock valuation by spreading false information about the company through several media channels and other publications. It's where the valuation rises, and then investors pounce on the opportunity to invest in the company.
However, the person or company that might have started this starts to dump their stocks when it reaches an all-time high booking their profits. It then causes a domino effect that causes huge losses to the investors and devaluation of the particular company.